French Competition Authority orders Google to negotiate remuneration with press publishers and news agencies under Article 15 of the Copyright Directive (as implemented in France).

Background

In April 2019 the European Parliament officially adopted Directive (EU) 2019/790 on Copyright and Related Rights in the Digital Single Market (the Copyright Directive) The directive seeks to harmonise copyright law at an EU level and introduces a package of measures relating to copyright in the digital age. The Copyright Directive also institutes a number of new exceptions to copyright infringement, allowing certain uses of copyrighted works without the permission of the copyright owner, including the exceptions for text and data mining and the exception for digital/cross-border teaching. These measures have been broadly welcomed, although some have proven more controversial. Articles 15 (the press publishers’ right) and 17 (concerning online content-sharing service providers), in particular, have been the subject of much debate.

Why is Article 15 Controversial?

Article 15 provides press publishers (like news publishers and agencies) established in a Member State with a new neighbouring right to claim revenue from online uses of their publications by search engines, news aggregators, and other “information society service providers”. The right applies even if the publisher is not the original author of the work and effectively enables a publisher to charge fees for online uses (whether in whole or in part) of its works. Article 15 also provides that authors of works incorporated into press publications must receive an “appropriate share” of the revenues received by press publishers for such works. The right has a duration of two years from 1 January following the year of publication. Covered “press publications” include journalistic publications in any media (including print, photographs, and videos), subject to certain exclusions, including:

• Private or non-commercial uses of press publications by individual users
• Acts of hyperlinking (to address earlier criticism of the Article constituting a ‘link tax’)
• The use of “individual words or very short extracts” of a press publication
• Existing exceptions in law, including for the purposes of criticism and review

The right established by Article 15 has been controversial and the drafting of the provision has been criticised, particularly for the lack of clarity surrounding the exemptions from making such payments, such as the intended meaning of “very short extracts”. The meaning ascribed to an “appropriate share” of revenues for authors has also been criticised as being unclear.

French Implementation and Decision of the FCA

France implemented Article 15 via the Neighbouring Rights Act which took effect on 24 October 2019.  This was the first implementation of a part of the Copyright Directive into a Member State’s national laws.

Following the law’s implementation, Google elected to no longer display press publishers’ content within its search results, unless such display was authorised by the press publishers free of charge. In response, two unions representing French press publishers, Syndicat des Éditeurs de la Presse Magazine and l’Alliance de la Presse d’Information Générale, and l’Agence France Presse, filed a complaint against Google to the French Competition Authority (FCA), claiming that Google’s practice constituted an abuse of a dominant position as well as an abuse of economic dependence. The complainants sought interim measures that would oblige Google to enter into “good faith negotiations” with press publishers in France.

In April 2020, the FCA ruled on the interim measures, granting the request, and held that (amongst other findings), given Google’s dominant market position, Google was imposing unfair trading conditions on press publishers and news agencies in an attempt to circumvent the Neighbouring Rights Act. Google is now required to negotiate in good faith with press publishers and news agencies on (i) the terms and conditions of press publication, and (ii) the remuneration due to publishers and news agencies for the use of their content, within three months from the request of the press publishers and news agencies and with the outcome of such negotiations to be applied as of 24 October 2019 (i.e., since the law entered into force). These interim measures will remain in place until the FCA rules on the merits of the complaint.

Going Global?

In Germany, implementation of the Copyright Directive was subject to public consultation until 31 January 2020. Stakeholder responses to this consultation expressed concern that, once Article 15 is implemented in Germany, online platforms will take a similar approach to that taken in France. However, the FCA ruling, although not binding outside of France, could have a dissuasive impact on the actions online platforms decide to take in other Member States.

Outside of the EU and independent from the Copyright Directive, an inquiry by the Australian Competition and Consumer Commission (ACCC) into digital platforms found that there was an imbalance of bargaining power between online platforms and traditional media companies. In an attempt to address this, the Australian government announced plans to draft a mandatory code to include a regime of revenue sharing between online platforms and Australian media groups as progress on a voluntary agreement between these parties had slowed. In response, Google warned it could withdraw its Google News service from nations that impose charges for displaying media content. Similarly in Brazil, the Brazilian Association for Newspapers has asked the Brazilian competition authority to fine Google for taking away advertising revenues that the publishers would have received if users had directly visited their websites (rather than visiting Google News), and to order Google to compensate the publishers for displaying their content. The Brazilian competition authority has not yet released its decision.

The Future of Press Publishers’ Rights

The European Parliament believes that granting legal recognition to press publishers as rightholders will provide for better negotiation over the digital use of content and help to align the rights relevant to the internet economy. Whilst the decision of the FCA may indicate how other courts and regulators will interpret this obligation, whether the Court of Justice of the European Union will interpret Article 15 in a similar manner remains to be seen.

For the moment, the parameters and application of press publishers’ rights will remain an area of uncertainty for rightholders, search engines, social media platforms, and news aggregation platforms alike.

This post was prepared with the assistance of Katie Henshall in the London office of Latham & Watkins.